Budget +93: At Last, A Deal

And now, perhaps the beginning of the end of a saga we're all tired of living through: legislative leaders and Governor Arnold Schwarzenegger have finally resolved their differences over a new spending plan for the state.

The agreement announced tonight comes as the state enters the fourth month of the fiscal year -- the longest impasse ever. Word is that a formal legislative vote will come as soon as next Thursday.

Now for the frustrating part: we're not going to get a full look at what's in it for a while.
What we do know is that the final elements $19 billion deficit fix has been some, but not all, of the holdup since the mysterious "framework" was announced more than a week ago. Assuming many of the parameters discussed by various sources have held, then we probably can assume that the big sticking points -- some kind of pension reform, as well as something which can be construed as budget reform. The latter is something that wouldn't happen for a while anyway, given most everyone agrees that voters would have to ratify any such systemic budget changes in the voting booth in 2012.

Republicans are already casting the budget deal as a victory. Assembly GOP Leader Martin Garrick released a statement calling it "a no-tax budget that protects California jobs." Of course, we can't be sure how to define a tax or lack thereof -- as so many discussions have relied on the suspension of a business tax break that, for the businesses impacted, would result in a higher tax burden than called for in existing law.

Leaders say all will be known, in time. "We intend to have a fully public and transparent airing of the agreement," Senate President pro Tem Darrell Steinberg told reporters tonight. That will likely happen next Wednesday.

But perhaps the most intriguing question is whether this budget deal has some kind of solution to the state's most immediate need: cold hard cash.

A spokesperson for Controller John Chiang said this afternoon that even an immediate budget deal places the state in need of as much as $7 billion in cash before the end of the month. Without that cash, the issuance of IOUs is reportedly almost inevitable. Chiang's spokesperson Hallye Jordan says current projections show the state with less than $2 billion on hand in a matter of weeks, and a four month backlog of unpaid invoices -- by the end of October -- that will total about $8 billion.

Absent a budget deal that somehow frees up a considerable amount of cash, the state would be looking at a second round of IOUs in as many years -- a promise to pay that, in 2009, created all kinds of havoc for those who needed their money and which cost the state both money and reputation in financial circles.

The new budget, by the time it's ratified by the Legislature and signed by Schwarzenegger, will have been in place for less than a month when voters elect the next governor; and both major candidates have pledged to roll their sleeves up and dive in sooner rather than later.

About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk. He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.